UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
THE MANITOWOC COMPANY, INC.
ENODIS plc and
ENODIS CORPORATION,
Defendants.
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Civil Action No.: 1:08-cv-0107
Description: Antitrust
Judge: Kennedy, Henry H
Date Stamp: October 6, 2008
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PROPOSED FINAL JUDGMENT
WHEREAS, Plaintiff, the United States of America, filed its Complaint
on October 6, 2008, the United States and defendants, The Manitowoc
Company, Inc., Enodis plc, and Enodis Corporation, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law, and without this
Final Judgment constituting any evidence against or admission by any
party regarding any issue of law or fact;
AND WHEREAS, defendants agree to be bound by the provisions of this
Final Judgment pending its approval by the Court;
AND WHEREAS, the essence of this Final Judgment is the prompt and
certain divestiture of certain rights and assets by the defendants to
assure that competition is not substantially lessened;
AND WHEREAS, the United States requires defendants to make certain
divestitures for the purpose of remedying the loss of competition alleged
in the Complaint;
AND WHEREAS, defendants have represented to the United States that
the divestitures required below can and will be made, and that defendants
will later raise no claim of hardship or difficulty as grounds for asking
the Court to modify any of the divestiture provisions contained below;
NOW, THEREFORE, before any testimony is taken, without trial or adjudication
of any issue of fact or law, and upon consent of the parties, it is
hereby ORDERED, ADJUDGED, AND DECREED:
I. Jurisdiction
This Court has jurisdiction over the subject matter of and each of
the parties to this action. The Complaint states a claim upon which
relief may be granted against the defendants under Section 7 of the
Clayton Act, as amended (15 U.S.C. § 18).
II. Definitions
As used in this Final Judgment:
- "Acquirer" means the entity to whom defendants divest the Divestiture
Business.
- "Enodis" means defendant Enodis plc, a corporation registered in
England and Wales with its headquarters in London, England, and Enodis
Corporation, a Delaware corporation with its headquarters in New Port
Richey, Florida, and their successors, assigns, parents, subsidiaries,
divisions, groups, affiliates, partnerships, and joint ventures, and
all of their directors, officers, managers, agents, and employees.
- "Manitowoc" means defendant The Manitowoc Company, Inc., a Wisconsin
corporation headquartered in Manitowoc, Wisconsin, its successors,
assigns, parents, subsidiaries, divisions, groups, affiliates, partnerships,
and joint ventures, and all of their directors, officers, managers,
agents, and employees.
- "Closing Date" means the date on which the transfer of the Divestiture
Assets from the defendants to the Acquirer has been completed.
- "Divestiture Business" means Enodis's entire business engaged in
the development, production, distribution, and sale of ice machines,
ice machine parts, and related equipment (such as ice bins, ice dispensers,
and water filtration systems) in the United States, including, but
not limited to:
- Enodis's facility located in Fairfax, South Carolina, which
is owned by Scotsman Group, Inc. (now known as Scotsman Group
L.L.C.);
- Enodis's facility located in Vernon Hills, Illinois, which is
leased by Scotsman Group, Inc. (now known as Scotsman Group L.L.C.);
- Enodis's facility located in Denver, Colorado, which is owned
by Welbilt Corporation (now known as Enodis Corporation);
- Enodis's facility located in Pomona, California, which is leased
by Scotsman Group, Inc. (now known as Scotsman Group L.L.C.);
- All tangible assets used in the Divestiture Business, including,
but not limited to, all research and development activities; all
manufacturing equipment, tooling and fixed assets, personal property,
inventory, office furniture, materials, supplies, and other tangible
property (including replacement hardware for the Vernon Hills,
Illinois facility that defendants are required to purchase pursuant
to Section II, Paragraph E below); all licenses, permits and authorizations
issued by any governmental organization relating to the Divestiture
Business; all contracts, teaming arrangements, agreements, leases,
commitments, certifications, and understandings relating to the
Divestiture Business, including, but not limited to, supply and
distribution agreements; all customer lists, accounts, and credit
records; all repair and performance records and all other records;
and
- All intangible assets used in the development, production, distribution,
and sale of ice machines, ice machine parts, and related equipment,
including, but not limited to, all contractual rights (to the
extent assignable), except for contracts that are not primarily
for products or services used by the Divestiture Business; all
rights under licenses, permits and authorizations issued by any
governmental organization relating to the Divestiture Business;
patents, licenses and sublicenses, intellectual property, copyrights,
trademarks, trade names (including any use of the name Scotsman
or Ice-O-Matic in the United States), service marks, service names,
technical information, computer software and related documentation
(including replacement software and related documentation that
defendants are required to purchase, and applications and data
that defendants are required to transfer to hardware, for the
Vernon Hills, Illinois facility pursuant to Section II, Paragraph
E below), know-how, trade secrets, drawings, blueprints, designs,
design protocols, specifications for materials, specifications
for parts and devices, safety procedures for the handling of materials
and substances, quality assurance and control procedures, design
tools and simulation capability, all manuals and technical information
defendants provide to their own employees, customers, suppliers,
agents or licensees; and all research data concerning historic
and current research and development efforts (up to the Closing
Date of the divestiture required by Section IV or Section V),
including, but not limited to, designs of experiments, and the
results of successful and unsuccessful designs and experiments;
except that the Divestiture Business shall not include the servers,
applications, and related documentation located at the Vernon Hills,
Illinois facility that are not used primarily in the operation of
the Divestiture Business, provided that within 45 days after the filing
of the Complaint in this matter, defendants take all steps necessary
(including the purchase of replacement hardware, the purchase, licensing,
or provision of software and related documentation, and the transfer
of applications and data) to ensure that all information technology
operations used by the Divestiture Business are maintained at levels
of functionality equivalent or superior to the levels of functionality
that exist as of the filing of the Complaint in this matter. Defendants
shall also take all steps necessary to purge any data related to the
Divestiture Business from hardware and backup media at Vernon Hills
that will not be divested under this provision. The Divestiture Business
shall not include the tangible or intangible assets comprising the
Enodis facility in New Port Richey, Florida, with the exception of
the following: (1) any software, electronically stored information,
or documents arising from research and development activities related
to the ice machine business; (2) any assets used primarily in the
operation of the ice machine business, or (3) any assets necessary
for operation of the ice machine business.
- "Frimont Business" means Enodis plc's Frimont S.p.A. business, which
produces commercial ice machines for the European market and which
the European Commission has required to be divested.
III. Applicability
- This Final Judgment applies to Manitowoc and Enodis, as defined
above, and all other persons in active concert or participation with
any of them who receive actual notice of this Final Judgment by personal
service or otherwise.
- If, prior to complying with Section IV and V of this Final Judgment,
defendants sell or otherwise dispose of all or substantially all of
their assets or of lesser business units that include the Divestiture
Business, they shall require the purchaser to be bound by the provisions
of this Final Judgment. Defendants need not obtain such an agreement
from the Acquirer of the assets divested pursuant to this Final Judgment.
IV. Divestitures
- Defendants are ordered and directed, within 150 calendar days after
the filing of the Complaint in this matter, or five (5) calendar days
after notice of the entry of this Final Judgment by the Court, whichever
is later, to divest the Divestiture Business in a manner consistent
with this Final Judgment to a single Acquirer acceptable to the United
States, in its sole discretion after consultation with the European
Commission. The United States, in its sole discretion, may agree to
one or more extensions of this time period not to exceed sixty (60)
calendar days in total, and shall notify the Court in such circumstances.
Defendants agree to use their best efforts to divest the Divestiture
Business as expeditiously as possible.
- In accomplishing the divestiture ordered by this Final Judgment,
defendants promptly shall make known, by usual and customary means,
the availability of the Divestiture Business. Defendants shall inform
any person making inquiry regarding a possible purchase of the Divestiture
Business that they are being divested pursuant to this Final Judgment
and provide that person with a copy of this Final Judgment. Defendants
shall offer to furnish to all prospective Acquirers, subject to customary
confidentiality assurances, all information and documents relating
to the Divestiture Business customarily provided in a due diligence
process except such information or documents subject to the attorney-client
privilege or work-product doctrine. Defendants shall make available
such information to the United States at the same time that such information
is made available to any other person.
- Defendants shall provide the Acquirer and the United States information
relating to all personnel involved in development, production, distribution,
and sales related to the Divestiture Business to enable the Acquirer
to make offers of employment. Defendants will not interfere with any
negotiations by the Acquirer to employ any employee whose primary
responsibility is development, production, distribution, and sales
related to the Divestiture Business, and will not interfere with negotiations
by the Acquirer to employ the following three Enodis employees who
work at the Vernon Hills, Illinois facility: (1) the Senior Business
Analyst and Developer; (2) the Unix Administrator and Network Manager;
and (3) the Computer Operator and Systems Specialist.
- Defendants shall permit prospective Acquirers of the Divestiture
Business to have reasonable access to personnel and to make inspections
of the physical facilities of the Divestiture Business; access to
any and all environmental, zoning, and other permit documents and
information; and access to any and all financial, operational, or
other documents and information customarily provided as part of a
due diligence process.
- Defendants shall warrant to the Acquirer that each asset will be
operational on the date of sale.
- Defendants shall not take any action that will impede in any way
the permitting, operation, or divestiture of the Divestiture Business.
Defendants shall not exercise any contractual right to prevent, or
otherwise attempt in any way to impede, sales or service representatives
that represent Enodis in connection with the Divestiture Business
from representing the Acquirer in the sale or servicing of products
sold by the Divestiture Business.
- Enodis shall warrant to the Acquirer that there are no material
defects, and Manitowoc shall warrant that it is not aware of any material
defects, in the environmental, zoning or other permits pertaining
to the operation of each asset, and that following the sale of the
Divestiture Business, defendants will not undertake, directly or indirectly,
any challenges to the environmental, zoning, or other permits relating
to the operation of the Divestiture Business.
- Notwithstanding anything to the contrary in this Final Judgment,
at the option of the Acquirer, defendants shall enter into a transition
services agreement for a limited period, with respect to information
technology and other support services that are reasonably necessary
to operate the Divestiture Business, with the scope, terms and conditions
of such agreement being subject to the approval of the United States
in its sole discretion.
- At the option of the Acquirer, defendants shall use their best efforts
to procure the assignment of contractual rights referenced in Section
II, Paragraph E(6) before the Closing Date of the divestiture required
by Section IV or Section V.
- Defendants shall not interfere with any effort by the Acquirer to
negotiate a contract with any supplier of any product purchased by
the Divestiture Business as of the filing of the Complaint in this
matter. If requested by the Acquirer:
- Defendants shall provide information or documentation relating
to controllers, compressors, condensers, valves, and copper strips,
or any other product customized for the Divestiture Business by
any supplier, that are purchased by the Divestiture Business under
contracts as to which the defendants are unable to secure effective
assignment to the Acquirer or under contracts that are not primarily
for products or services used by the Divestiture Business; and
- If the Acquirer is unable, prior to the Closing Date of the
divestiture required by Section IV or Section V, to negotiate
and enter into a contract, on commercially reasonable terms with
a qualified and reliable supplier, providing for the Acquirer's
supply of copper strips, or any other product for which an alternative
supplier is not available as of the Closing Date, that have the
same characteristics (or, so long as the product allows continuation
of the Divestiture Business without disruption, having substantially
the same characteristics) and are of the same, or superior, quality
as those purchased by the Divestiture Business as of the filing
of the Complaint in this matter, defendants shall purchase any
such product on behalf of the Acquirer and resell it to the Acquirer
at the price specified in defendants' supply contract as of the
date of the purchase of the product for the Divestiture Business.
This obligation shall expire upon the earlier of (1) the Acquirer
or Divestiture Business having negotiated a contract of purchase
of any such product meeting the criteria set forth above, (2)
the Acquirer notifying defendants in writing that the Divestiture
Business no longer intends to purchase any such product under
this provision, (3) the expiration of the supply contract in accordance
with the terms of that contract as they existed as of the date
of the filing of the Complaint in this matter, or (4) one year
after the date of the divestiture required under Section IV or
Section V. Defendants shall not discuss, provide, disclose, or
otherwise make available, directly or indirectly, any information
related to such purchases and resales to any defendant personnel
involved in production, marketing, distribution, or sales of ice
machines.
- Unless the United States otherwise consents in writing, the divestiture
pursuant to Section IV, or by trustee appointed pursuant to Section
V, of this Final Judgment, shall include the entire Divestiture Business,
and shall be accomplished in such a way as to satisfy the United States,
in its sole discretion, that the Divestiture Business can and will
be used by the Acquirer as part of a viable, ongoing business engaged
in the development, production, distribution, and sale of commercial
cube ice machines, ice machine parts, and related equipment in the
United States. The divestitures, whether pursuant to Section IV or
Section V of this Final Judgment,
- shall be made to the acquirer of the Frimont Business;
- shall be made to an Acquirer that, in the United States's sole
judgment, has the intent and capability (including the necessary
managerial, operational, technical and financial capability) of
competing effectively in the development, production, distribution,
and sale of commercial cube ice machines, ice machine parts, and
related equipment in the United States; and
- shall be accomplished so as to satisfy the United States, in
its sole discretion, that none of the terms of any agreement between
the Acquirer and defendants give defendants the ability unreasonably
to raise the Acquirer's costs, to lower the Acquirer's efficiency,
or otherwise to interfere in the ability of the Acquirer to compete
effectively in the development, production, distribution, and
sale of commercial cube ice machines, ice machine parts, and related
equipment in the United States.
V. Appointment of Trustee
- If defendants have not divested the Divestiture Business within
the time period specified in Section IV, Paragraph A, defendants shall
notify the United States of that fact in writing. Upon application
of the United States, the Court shall appoint a trustee selected by
the United States, in consultation with the European Commission to
enable selection of a trustee acceptable to both the United States
and the European Commission, and approved by the Court to effect the
divestiture of the Divestiture Business.
- After the appointment of a trustee becomes effective, only the trustee
shall have the right to sell the Divestiture Business. The trustee
shall have the power and authority to accomplish the divestiture to
an Acquirer acceptable to the United States at such price and on such
terms as are then obtainable upon reasonable effort by the trustee,
subject to the provisions of Sections IV, V, and VI of this Final
Judgment, and shall have such other powers as this Court deems appropriate.
Subject to Section V, Paragraph D of this Final Judgment, the trustee
may hire at the cost and expense of defendants any investment bankers,
attorneys, or other agents, who shall be solely accountable to the
trustee, reasonably necessary in the trustee's judgment to assist
in the divestiture.
- Defendants shall not object to a sale by the trustee on any ground
other than the trustee's malfeasance or that the Acquirer has not
been approved by the European Commission. Any objection by defendants
on the ground of the trustee's malfeasance must be conveyed in writing
to the United States and the trustee within ten (10) calendar days
after the trustee has provided the notice required under Section VI;
any objection by defendants based on lack of approval from the European
Commission must be conveyed in writing to the United States and the
trustee within two (2) business days after the European Commission
notifies defendants that it does not approve of the proposed Acquirer.
- The trustee shall serve at the cost and expense of defendants, on
such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of the assets sold by
the trustee and all costs and expenses so incurred. After approval
by the Court of the trustee's accounting, including fees for its services
and those of any professionals and agents retained by the trustee,
all remaining money shall be paid to defendants and the trust shall
then be terminated. The compensation of the trustee and any professionals
and agents retained by the trustee shall be reasonable in light of
the value of the Divestiture Business and based on a fee arrangement
providing the trustee with an incentive based on the price and terms
of the divestiture and the speed with which it is accomplished, but
timeliness is paramount.
- Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestiture. The trustee and any consultants,
accountants, attorneys, and other persons retained by the trustee
shall have full and complete access to the personnel, books, records,
and facilities of the business to be divested, and defendants shall
develop financial and other information relevant to such business
as the trustee may reasonably request, subject to reasonable protection
for trade secret or other confidential research, development, or commercial
information. Defendants shall take no action to interfere with or
to impede the trustee's accomplishment of the divestiture.
- After its appointment, the trustee shall file monthly reports with
the United States and the Court setting forth the trustee's efforts
to accomplish the divestiture ordered under this Final Judgment. To
the extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket
of the Court. Such reports shall include the name, address, and telephone
number of each person who, during the preceding month, made an offer
to acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring, any
interest in the Divestiture Business, and shall describe in detail
each contact with any such person. The trustee shall maintain full
records of all efforts made to divest the Divestiture Business.
- If the trustee has not accomplished the divestiture ordered under
this Final Judgment within six (6) months after its appointment, the
trustee shall promptly file with the Court a report setting forth
(1) the trustee's efforts to accomplish the required divestiture,
(2) the reasons, in the trustee's judgment, why the required divestiture
has not been accomplished, and (3) the trustee's recommendations.
To the extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket
of the Court. The trustee shall at the same time furnish such report
to the United States which shall have the right to make additional
recommendations consistent with the purpose of the trust. The Court
thereafter shall enter such orders as it shall deem appropriate to
carry out the purpose of the Final Judgment, which may, if necessary,
include extending the trust and the term of the trustee's appointment
by a period requested by the United States.
VI. Notice of Proposed Divestiture
- Within two (2) business days following execution of a definitive
divestiture agreement, defendants or the trustee, whichever is then
responsible for effecting the divestiture required herein, shall notify
the United States of any proposed divestiture required by Section
IV or V of this Final Judgment. If the trustee is responsible, it
shall similarly notify defendants. The notice shall set forth the
details of the proposed divestiture and list the name, address, and
telephone number of each person not previously identified who offered
or expressed an interest in or desire to acquire any ownership interest
in the Divestiture Business, together with full details of the same.
- Within fifteen (15) calendar days of receipt by the United States
of such notice, the United States may request from defendants, the
proposed Acquirer, any other third party, or the trustee, if applicable,
additional information concerning the proposed divestiture, the proposed
Acquirer, and any other potential Acquirer. Defendants and the trustee
shall furnish any additional information requested within fifteen
(15) calendar days of the receipt of the request, unless the parties
shall otherwise agree.
- Within thirty (30) calendar days after receipt of the notice or
within twenty (20) calendar days after the United States has been
provided the additional information requested from defendants, the
proposed Acquirer, any third party, and the trustee, whichever is
later, the United States shall provide written notice to defendants
and the trustee, if there is one, stating whether or not it objects
to the proposed divestiture. If the United States provides written
notice that it does not object, the divestiture may be consummated,
subject only to defendants' limited right to object to the sale under
Section V, Paragraph C of this Final Judgment. Absent written notice
that the United States does not object to the proposed Acquirer or
upon objection by the United States, a divestiture proposed under
Section IV or Section V shall not be consummated. Upon objection by
defendants under Section V, Paragraph C, a divestiture proposed under
Section V shall not be consummated unless approved by the Court.
VII. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to Section IV or V of this Final Judgment.
VIII. Hold Separate
Until the divestiture required by this Final Judgment has been accomplished,
defendants shall take all steps necessary to comply with the Hold Separate
Stipulation and Order entered by this Court. Defendants shall take no
action that would jeopardize the divestiture ordered by this Court.
IX. Affidavits
- Within twenty (20) calendar days of the filing of the Complaint
in this matter, and every thirty (30) calendar days thereafter until
the divestiture has been completed under Section IV or V, defendants
shall deliver to the United States an affidavit as to the fact and
manner of its compliance with Section IV or V of this Final Judgment.
Each such affidavit shall include the name, address, and telephone
number of each person who, during the preceding thirty (30) calendar
days, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the Divestiture Business,
and shall describe in detail each contact with any such person during
that period. Each such affidavit shall also include a description
of the efforts defendants have taken to solicit buyers for the Divestiture
Business, and to provide required information to prospective Acquirers,
including the limitations, if any, on such information. Assuming the
information set forth in the affidavit is true and complete, any objection
by the United States to information provided by defendants, including
limitation on information, shall be made within fourteen (14) calendar
days of receipt of such affidavit.
- Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to the United States an affidavit
that describes in reasonable detail all actions defendants have taken
and all steps defendants have implemented on an ongoing basis to comply
with Section VIII of this Final Judgment. Defendants shall deliver
to the United States an affidavit describing any changes to the efforts
and actions outlined in defendants' earlier affidavits filed pursuant
to this section within fifteen (15) calendar days after the change
is implemented.
- Defendants shall keep all records of all efforts made to preserve
and divest the Divestiture Business until one year after such divestiture
has been completed.
X. Compliance Inspection
- For the purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should
be modified or vacated, and subject to any legally recognized privilege,
from time to time authorized representatives of the United States
Department of Justice Antitrust Division ("DOJ"), including consultants
and other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to defendants, be permitted:
- access during defendants' office hours to inspect and copy,
or at the option of the United States, to require defendants to
provide hard copy or electronic copies of, all books, ledgers,
accounts, records, data, and documents in the possession, custody,
or control of defendants, relating to any matters contained in
this Final Judgment; and
- to interview, either informally or on the record, defendants'
officers, employees, or agents, who may have their individual
counsel present, regarding such matters. The interviews shall
be subject to the reasonable convenience of the interviewee and
without restraint or interference by defendants.
- Upon the written request of an authorized representative of the
Assistant Attorney General in charge of the Antitrust Division, defendants
shall submit written reports or responses to written interrogatories,
under oath if requested, relating to any of the matters contained
in this Final Judgment as may be requested.
- No information or documents obtained by the means provided in this
section shall be divulged by the United States to any person other
than an authorized representative of the executive branch of the United
States, except in the course of legal proceedings to which the United
States is a party (including grand jury proceedings), or for the purpose
of securing compliance with this Final Judgment, or as otherwise required
by law.
- If at the time information or documents are furnished by defendants
to the United States, defendants represent and identify in writing
the material in any such information or documents to which a claim
of protection may be asserted under Rule 26(c)(1)(G) of the Federal
Rules of Civil Procedure, and defendants mark each pertinent page
of such material, "Subject to claim of protection under Rule 26(c)(1)(G)
of the Federal Rules of Civil Procedure," then the United States shall
give defendants ten (10) calendar days notice prior to divulging such
material in any legal proceeding (other than a grand jury proceeding).
XI. No Reacquisition
Defendants may not reacquire any part of the Divestiture Business
during the term of this Final Judgment.
XII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and directions
as may be necessary or appropriate to carry out or construe this Final
Judgment, to modify any of its provisions, to enforce compliance, and
to punish violations of its provisions.
XIII. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall expire
ten (10) years from the date of its entry.
XIV. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. § 16, including making copies available
to the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States's responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
Date: __________________
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Court approval subject to procedures
of Antitrust Procedures and Penalties
Act, 15 U.S.C. § 16
_______________________________
United States District Judge |
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